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Friday, November 4, 2011

Why Is Paul Bryant Jr. On The UA Board of Trustees And Not In Federal Prison?

Paul Bryant Jr. (right), with
 UA athletics director Mal Moore

The question hovering above today's meeting in Tuscaloosa of the University of Alabama Board of Trustees will be this: Should UAB be allowed to build a 30,000-seat on-campus football stadium?

But the big question, the one that really needs to be asked, is this: Why is a man with documented ties to insurance fraud serving on the Board of Trustees? In fact, why is that man, Paul W. Bryant Jr., presiding as president pro tempore over a meeting where decisions about large amounts of public funds are being made?

To put it in blunt and stark terms: Why is Paul Bryant Jr. serving on the board of Alabama's flagship university instead of serving time in a federal prison?

After all, that's where a Pennsylvania lawyer/entrepreneur named Allen W. Stewart has been residing for quite some time, after receiving a 15-year sentence for orchestrating a scam that left thousands of Americans with worthless insurance policies. Public documents show that Alabama Reassurance, a company owned by Paul Bryant Jr., was in the middle of the Stewart scam.

Stewart was convicted on all 135 counts against him. And court documents show that nine of those counts directly involved Alabama Reassurance in "a wire fraud scheme to deceive state insurance regulators involving reinsurance." What was the goal? To enrich the executives at three insurance companies "in order to inflate their financial statements."

One of those three companies was Alabama Reassurance. It had $238 million in "admitted assets" and fell under the umbrella of Greene Group, Inc., led by president Paul Bryant Jr.

Is it possible that Alabama Re underlings committed fraud without Bryant's knowledge? That seems unlikely. Documents from the Alabama Department of Insurance show that Alabama Re had only two full-time employees--a president named Scott Moore Phelps and a vice president/actuary named William Rodney Windham. They were joined on the board of directors by Paul Bryant Jr., president of Greene Group Inc.; Allen Wayne May, a Tuscaloosa veterinarian; and Sam Moore Phelps, a Tuscaloosa lawyer.

How do you run a $238-million company with two people? Perhaps that question should be posed to Paul Bryant Jr.

Alabama Re, it turns out, was one peculiar operation. We shined light on its business practices in the following post:

Paul Bryant Jr. and Alabama Reassurance: A Portrait of Fraud

In such a tightly held organization, is it possible that Bryant could not have known about massive fraud taking place on his watch? The answer clearly seems to be no.

If you care about UAB and its future--and everyone living in Alabama should--how do you feel about the notion that critical decisions are being made by a man who has expertise in insurance fraud--and how to get away with it?

It's not as if serious doubt exists about Bryant's connections to fraud. At the bottom of this post is a  ruling from the U.S. District Court for the Eastern District of Pennsylvania that upholds Allen W. Stewart's convictions--and proves Alabama Re's role in the case. And we quote from a pertinent section of that ruling, encompassed in footnote 11:

11. The relevant portions of the charge read as follows:
Counts 24 through 32 charge a wire fraud scheme to deceive state insurance regulators involving reinsurance. The superseding indictment alleges that in late 1992 or early 1993 the defendant devised a scheme to deceive state regulators and others regarding the true and complete reinsurance arrangements involving Summit National Life Insurance Company, its subsidiary Fidelity General Life Insurance Company, and the Alabama Reassurance Company in order to inflate their financial statements.

Let's return to a question we asked earlier: Why will Paul Bryant Jr. be presiding today over a meeting of the University of Alabama Board of Trustees instead of sitting in a federal prison cell like Allen W. Stewart?

To be fair to Bryant, we should note that his company was tied to only nine counts while Stewart was convicted of all 135 counts. Had Bryant gone to trial and been convicted--a virtual certainty considering the strength of the evidence in the Pennsylvania case--he might have received a sentence considerably lighter than the 15 years that Stewart got.

So perhaps Bryant would be a free man today. But would he have been nominated to serve on the UA Board of Trustees? Even in Alabama, the notion of a convicted felon serving on a university board might be frowned upon.

It's also possible that Bryant would have received even a longer sentence than did Stewart. That's because we've never learned the full extent of the financial skulduggery at Alabama Re. Is it possible that Bryant's company concocted schemes that went way beyond anything involving Allen W. Stewart? Stewart must have turned to Alabama Re for a reason, right? Is that because he knew the company had a reputation for engaging in fraudulent schemes?

So why, again, has Paul Bryant Jr. never been held accountable for his apparent crimes? Why is he president of a major university governing board, despite his unmistakable ties to business fraud?

We haven't been able to fully nail down the answer to those questions. But we suspect it has to do with a certain individual who was serving in the U.S. Department of Justice at the time, a person who just happens to be a graduate of . . . the University of Alabama--a person who reportedly has a history of doing legal work for Paul Bryant Jr.

Here is how we explained it in an earlier post:

Public documents show that Alabama Reassurance was implicated in a $15-million scheme that netted a 15-year prison sentence for a Pennsylvania man named Allen W. Stewart in the late 1990s. An investigation of Alabama Re was called off, apparently because Bryant had friends in the U.S. attorney's office for the Northern District of Alabama.

G. Douglas Jones, now a lawyer at the Birmingham firm of Haskell Slaughter, had just become U.S. attorney for the Northern District of Alabama when the Alabama Re investigation was called off. Multiple sources tell Legal Schnauzer that Jones has ties to Bryant and has done legal work for him. I twice have asked Jones if he called off the Alabama Re investigation, and he has refused to answer the question. In fact, Jones has refused to answer any questions from me--including questions about his work with Rob Riley, son of former Governor Bob Riley, on a federal HealthSouth lawsuit that netted millions of dollars for plaintiffs' lawyers. Jones' refusal to answer questions from me is odd, given that he regularly is quoted in various media outlets. He becomes mute when the subjects of Paul Bryant Jr. and Rob Riley are raised.

You might think that Doug Jones, as a former public servant and still an "officer of the court," would feel an obligation to discuss his decisions in the Alabama Re investigation--and his ties to Paul Bryant Jr. But you would be wrong; Doug Jones has made it clear that he feels no duty to answer to the public that paid his salary as a federal prosecutor.

Perhaps UAB supporters should be asking this: Is Doug Jones the guy who let Paul Bryant Jr. "skate" on apparent business crimes? Is UAB now paying a huge price because of Doug Jones' actions?

Alabama Re Memorandum Opinion

6 comments:

jeffrey spruill said...

How do you run a $238-million company with two people?

One person counts the money -- the other decides where to hide it!!

James Greek said...

Roger:

I'd bet my TV Guide Collection that Bear Bryant Sr. is spinning in his grave seeing his son doing all this mess.

jeffrey spruill said...

critical decisions are being made by a man who has expertise in insurance fraud--and how to get away with it?

*

Is corporate malfeasance a necessary ingredient in todays corporate world?

Are the elite trying to outdo the fraud & crimes of the other elite?

Why don't you tells us Jeffrey Immeldt how & why NBC Universal aquired Frank Batten Jr.'s Weather Channel.

But that would break corporate rules wouldn't it!

http://www.nytimes.com/2008/07/07/business/media/07weather.html

Anonymous said...

After tonight he probably is at Hillcrest or Partlow.

jeffrey spruill said...

In a time of universal deceit, telling the truth is a revolutionary act.

George Orwell

Robby Scott Hill said...

I can hear it now! That Roger Shuler is a "habitual line stepper." He's gone too far this time :)

Well folks. That's the First Amendment & Freedom of the Press at work.

Folks have turned their nose up at my Jones School of Law education, but the very same professors who taught me (John Eidsmoe & Henry Fowler) were the two Staff Attorneys for Alabama Supreme Court Justice Tom Parker who wrote the infamous decision in Dept. of Conservation v. Exxon with lots of help from his staff attorneys.

In fact, Dr. Eidsmoe taught me (and Justice Parker) everything I know about the First Amendment & Freedom of the Press.

It's an inconvenient truth that received my legal education including at least one "A" from the very engineers of the Republican judicial revolution in Alabama. So, all you members of the "Republican Brain Trust" can take comfort in knowing that my "shit degree" came from a very large dung heap on your farm ;^)

The facts presented in this post will never make it into a federal courthouse in Alabama, but they should have long before I graduated from law school. That's a big reason why Paul Bryant, Jr. was the guy whom I really worked for at the State Lands Division, not James Hillman Griggs or Barnett Lawley.

Bryant has held UAB & Alabama back for a long time for the same reason that Capitalism has held the American Worker back for generations - profits.

Paul Bryant, Jr. is the poster child for taxing the greedy to feed the needy.

This blog ain't some liberal conspiracy theory. This shit is real. People lives ruined for a dollar bill.